2015 Annual Report on Music Publishing

Author：Lin Jia-liang

Observations and Review Regarding Taiwan’s Music Environment

2015 Annual Report on Music Publishing

‘When was the last time you bought an album?’

If someone asks you how long it's been since you bought an album today – an era where even Apple’s iPod global sales are showing decline in 2016 – there are basically only two possibilities. The first is that the person is a serious music lover who has amassed a large collection of CDs; such people use such questions to bemoan the fact that CDs have become a thing of the past while also seizing on the chance to flaunt that they’re still one of the few oddities who buy physical media. The other is that they’re a lover of streaming services like iTunes, Spotify, KKBox, iNDIEVOX, and myMusic, or possibly are working in the industry; these people ask the question more rhetorically, to make a point about how no one spends money on physical albums any more.

The vinyl renaissance as industry savior

“No one spends money on physical albums anymore” – how accurate is this statement?

According to the Recording Industry Association of Japan (RIAJ), during 2015 a total of 223.719 million albums were produced in Japan, a drop of 1% from 2014. Despite that drop though, total record purchases actually increased by 0.1%, with total purchases valued at 254.449 billion yen. This was the first sign of positive growth in three years.

So why is production declining while total purchases rise? A careful look at the RIAJ's annual report shows that its downward revision of production numbers primarily derives from a 1% year-on-year reduction in the production of CD singles and a 2% decline in CD albums – or a total reduction of 55.144 million and 12.796 billion units respectively.

In addition, other high-resolution, high-fidelity album formats like SACD, DVD-Audio, and minidiscs saw sharp declines of almost 23%, or 348,000 units, while audio cassettes dropped by a massive 25%, or 800,000 units, dragging down the total production figures. Statistically, the only medium to buck this trend was vinyl, enjoying a 65% growth, which translated to an additional production of 662,000 units.

While this is still not enough to stanch the serious hemorrhage in sales of physical albums and in terms of units moved, with vinyl being a high-ticket item, this growth of 662,000 albums represents 1.175 billion yen in sales, not only helping minimize the downslide in sales value across physical media, but also helping physical media sales values for the year 2015 actually surpass 2014 figures. The implication of this is that vinyl has saved many record companies from otherwise miserable annual reports, becoming the savior of the Japanese record industry.

And it's not just Japan – in recent years, vinyl has been experiencing a “renaissance" in many countries, rescuing the industry in North America, the United Kingdom, continental Europe, and even Taiwan. Just look at the turnaround made by the well-known British record store chain HMV, which filed for bankruptcy just a few years ago.

Last year, on the back of the sales of vinyl and related hardware, they once again became the largest record company in the UK. According to official press releases, HMV branches around the UK were selling an average of one vinyl record every minute during the “golden week” ahead of Christmas, a pace almost on par with the glory days of the ‘60s and ‘70s.

Moreover, by reviewing the annual report on the British music market issued by the British Phonographic Industry (BPI) in 2015, one can see that vinyl sales in Great Britain reached their highest point in 21 years with a total of 2.1 million disks, 64% up on 2014, a growth roughly on par with Japan’s 65%.

Across the pond in the United States, the annual statistics of the Recording Industry Association of America (RIAA) show that in 2015, some 11.9 million vinyl records were sold nationwide, 32% up on the 9.2 million sold in 2014, for a total revenue increase of US$416 million and accounting for 20.6% of total physical album sales.

That 20.6% was the greatest percentage seen in the States since 1988. In contrast, CD sales slid by 10% with a total revenue of only US$2 billion. These numbers all underscore how the “vinyl renaissance” has become a powerful trend in global album sales and has yet to show any signs of declining.

Learning from abroad

Having read this far, you might wonder: “Why is this annual report on the publishing of Taiwanese traditional music albums opening with a discussion on the global vinyl renaissance?” Of course, there’s a reason behind this: Firstly, whenever someone argues that “no one buys records/albums anymore,” what they usually really mean is “no one buys CDs anymore.”

In reality, there’s more to “physical albums” than just CDs – as mentioned above, there are also vinyl, SACD, DVD-Audio, minidiscs, and cassettes still on the market. Therefore, before undertaking an analysis of the past year’s trends in traditional music publishing in Taiwan, I hope to first lay down a fundamental understanding of how “physical albums” are more than just CDs.

First of all, discussing how the vinyl renaissance has injected new life into the record industry, which has been in a slump for so long, is not solely to subvert the pessimistic view of many toward the music publishing industry, but to also help everyone understand that it isn't that music fans don’t buy records, rather there is a qualitative change taking place in the demand for and targeting of music products and in consumer behavior and psychology.

Right now, both music publishers and performers, creators, producers, agents, and other professionals need to look at the bigger picture and understand the latest developmental trends in the record industries of other countries. This way, they can learn from the experiences of these other countries and look again at the development of the music industry and market in Taiwan.

They need to look for commonalities and divergences to seek out the roots of the larger rises and falls in the market and finding the unique aspects of Taiwan's own industry environment. Look at vinyl or the currently fashionable digital streaming services and how the industry abroad has found supply-demand balances and explored new revenue models. Compared with them, how should Taiwan’s publishing industry move in the future and how should it readjust its marketing and channel strategies?

Such reflection and review should absolutely not be limited to popular music; traditional music is just as much a part of Taiwan’s music industry, including classical, religious, operatic, and crossover music genres, all of which need to focus on generating new approaches.

Finally, I would like to highlight the efforts of industry associations like the Recording Industry Association of America (RIAA), British Phonographic Industry (BPI), and Recording Industry Association of Japan (RIAJ), who produce detailed, reliable annual statistics on the industry for reference much needed by the industry, government agencies, and academia.

How about Taiwan? Prior to publication, I searched the Recording Industry Foundation in Taiwan (RIT) – that is, the International Federation of the Phonographic Industry (IFPI) Taiwan branch – for data on its official website, but was unable to find full statistics for the Taiwanese record publishing industry in 2015. This also means that I had some trouble providing supporting information for many of my analyses of the situation and direction of music publishing in Taiwan.

That said, even if the Recording Industry Foundation in Taiwan published full annual figures, I would still have to hold a certain degree of skepticism toward them based on past experience – after all, from sales charts to applications for major musical subsidies, figures have been inflated and fiddled immensely, putting them immensely out of touch with reality. How could anyone be convinced by the statistics released by Taiwanese record companies?

One traditional music vinyl per year

Although the RIT may not provide full statistics on 2015 sales of published music on CD, vinyl, or digital distribution, some things don’t need data for support when fieldwork or observations will do fine. For example, when you stroll through the aisles of the various record stores, it’s not hard to notice that the vinyl sections are taking more and more floor space and covering a broader and broader range of genres.

Based on the basic laws of supply and demand at the foundation of free-market economics, you can thus reasonable infer that the vinyl renaissance is still growing in the Taiwanese music market. If it weren’t, why would so many stores dedicate so much expensive space in their stores or plan so many vinyl markets, and why would the major record companies import so many foreign albums on vinyl?

With so many classic albums rereleased on vinyl, and even several recent, new, and upcoming albums in Mandarin, Taiwanese, and Hakka similarly released, does that mean vinyl versions have become a requirement? With vinyl such a notable part of the record industry today, how many albums were released on vinyl in Taiwan’s traditional music sphere last year?

Unless I’ve missed something, the answer should be “just one.” A Taiwanese-produced vinyl album that was released at the 2015 Kaohsiung International High-end Audio Show held by the Electrical Commercial Association of Kaohsiung, featuring a recording of the concert held at the Kaohsiung City Music Hall on September 21 the previous year by cellist Christine Walevska (with accompaniment by Akimi Fukuhara). Featuring the three movements of Brahms’ Cello Sonata no. 1 in E minor, the recording was about 25 minutes in length, and thus was released on 45 rpm rather than the more common 33 1/3 rpm.

With vinyl sales bucking sales trends around the world and major record stores willingly offering more space in an effort to get their piece of the vinyl pie, it seems impossible to imagine that last year Taiwan’s whole traditional music business published just one album, or that that one album wasn’t distributed by a record company or independent performer or band.

Do the major record companies simply not see any business opportunities for vinyl in traditional music? Or is there something else behind this counterintuitive situation? Does this mean that Taiwan’s local traditional music publishing strategies and record market are out of step with global trends?

Where is the value in publishing records?

After discovering how Taiwan had produced only one new classical recording on vinyl in an entire year, I am left wondering why Taiwan's record companies haven't done anything more. Is it that they can’t, or that they don’t want to? Perhaps it would be better to ask whether many Taiwanese musicians and bands are even aware they could release recordings on vinyl? Alternatively, to go a little further: How many Taiwanese musicians and bands are aware of the “market value” of their published works?